TMI Blog2008 (5) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... recovery of duty thereon was not permissible at all. The order of the Commissioner does not indicate adequate reasons to invoke proviso to Section 11A(1). On the basis of vague allegations made in the show cause notice neither the proviso to Section 11A(1) could have been invoked nor penalty could have been imposed upon the respondent under Rule 173Q of the Central Excise Rules. On the facts and in the circumstances of the case, this Court is of the opinion that the Tribunal did not commit any error in setting aside the order passed by the Commissioner and the instant appeal which lacks merits, deserves dismissal. Appeal dismissed. - 6468 of 2002 - - - Dated:- 9-5-2008 - Ashok Bhan and J.M. Panchal, JJ. [Judgment per : J.M. Pancha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as other income in the accounts and balance sheet of the respondent. 3. The Commissioner of Central Excise, Belgaum, issued a notice calling upon the respondent to show cause as to why duty of Rs. 7,41,750/- on the additional amount of consideration of Rs. 43 lakhs received by the respondent for the supply of machinery items be not levied under Rule 6(2) of the Central Excise Rules, 1944. The respondent gave reply to the said notice. However, the Commissioner of Central Excise, Belgaum, vide Order-in-Original No. 23/95, dated September 8, 1995 confirmed the entire duty demanded and also imposed penalty of Rs. 75,000/- upon the respondent under Rule 173Q of the Central Excise Rules. 4. Feeling aggrieved, the respondent filed an Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives will have the liberty of examining the machines manufactured by MKL during the process of manufacturing of such machines and also after the manufacture of the machines is completed, before or after the delivery of machines by MKL to the company." Part IV at Page 6 is for the price of the machines and states : "The price of the machines will be stipulated by the company in the orders placed upon MKL. All such prices shall be arrived at after prior negotiation between the parties hereto." Part VIII at Page 7 is for excise duty and states :- "The company shall reimburse the MKL the amount or amounts of excise duty paid by MKL on the manufacture of the Machines in terms of this agreement." 8. A bare reading of the terms of the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The order passed by the Commissioner does not indicate that no machines were subsequently manufactured by the respondent after using drawings, designs, jigs, fixtures, tooling etc. supplied by the ITC. Therefore, loading of the entire amount of Rs. 43 lakhs without such a finding and recovery of duty thereon was not permissible at all. The order of the Commissioner does not indicate adequate reasons to invoke proviso to Section 11A(1). On the basis of vague allegations made in the show cause notice neither the proviso to Section 11A(1) could have been invoked nor penalty could have been imposed upon the respondent under Rule 173Q of the Central Excise Rules. On the facts and in the circumstances of the case, this Court is of the opinion t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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